Traders were left hanging for almost four hours on Thursday after a technical glitch shut down all trading on the Australian Securities Exchange.

The failure, which halted trading shortly after 10am, left traders unable to act on key news out of Europe as it happened and forced the ASX to review all trades between market open and when trading was halted.

Shortly after the market opened at 10am on Thursday morning, the Australian Securities Exchange suspended trading following a “technical issue".

The failure prompted the ASX to review all trades made on Thursday morning in the minutes before trading was halted. Shortly after 12 noon the ASX said that all trades were valid and would stand.

“ASX has determined that all trades 27/10 are valid and will stand. ASX Markets remain in Enquire," the ASX said in an emailed incident update.

At 1.40pm AEDT, the ASX opened a practice market to test systems and at 2pm AEDT trading began again.

The Australian sharemarket closed up 2.49 per cent, while the All Ordinaries index gained 2.4 per cent, on the back of news from Europe of a hotly-anticipated deal to tackle the region’s crippling debt crisis. The sharemarket re-opened at 2pm AEDT on Thursday after a technical failure took the market offline for most of the day.

Ahead of the re-opening of the Australian market, the Dow Jones Industrial Average futures market shot up as much as 100 points, while the FTSE 100 futures rose as much as 80 points and the SPI futures climbed up to 62 points in response to Europe’s news.

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Regional markets were also higher on Thursday. The Hang Seng was trading up 1.39 per cent at 19,332.05, Singapore was 1.11 per cent higher at 2800.67 and the Nikkei was 0.54 per cent higher at 8795.28 shortly after 1.30pm.

The Australian currency was at 105.20 US cents by 1621 AEDT, up from 104.12 cent at midday before the deal was announced.

Shares in a raft of companies, including National Australia Bank, Woolworths, Ten Network and GPT, also saw some action after a bevy of profit results were announced on Thursday morning.

At 12.50pm AEDT the Aussie was trading at $US1.0461 – its session high – after the reports, up from an earlier low of $US1.0383 at 8.45am. The local currency closed at $US1.0399 on Wednesday.

Futures markets in the US and Europe were trading higher shortly after 1pm AEDT. The Dow Jones Industrial Average futures was up 93 points to 11,895, while the FTSE 100 was 71.5 points higher at 5595. The S&P 500 was up 12.2 points at 1249.6 and the SPI 200 was up 66 points at 4288.

At 12.20pm AEDT, the Dow Jones had been up 27 points to 11,829, while the FTSE 100 futures was 55.5 points higher at 5579.

A trader who declined to be named said that some algorithmic traders had been experiencing problems with their data feeds over the past two days, suggesting that problems may have been building for some time.

News service Reuters has described the technical glitch as “an embarrassment for the ASX, coming just days ahead of the launch of trading in Australia by rival bourse operator Chi-X".

A soft launch of Chi-X is in Australia is due on Monday.

In a statement, Assistant Treasurer Bill Shorten said: “I’ve been advised the issues are not related to the introduction of competition, and will not affect the launch of Chi-X on 31 October."

The failure came on a day when a number of companies with large shareholders posted financial results. Woolworths reported a 4.9 per cent increase in group sales to $14.6 billion for the September quarter as it again fell short of bitter rival Coles’ sales growth. As the market re-opened, shares were up 15¢ at $24.28.